Sidecut Reports

It looks like Sprint’s strategic decision to focus on the iPhone has finally allowed Verizon Wireless to sell more 4G phones than Sprint, according to financial numbers released Tuesday. According to Verizon the company sold 1.6 million 4G LTE smartphones during the quarter, as well as another 700,000 4G devices like USB modems and Wi-Fi hotspots. And while Sprint never calls out its 4G numbers its 4G partner Clearwire today pre-announced some Q4 metrics including 900,000 new 4G wholesale activations, which you can pretty much translate into being mostly Sprint 4G smartphones and a small number of other devices, like hotspots and USBs.

(Editor’s note: You won’t find the 4G LTE device breakout numbers in the Verizon press release; the numbers were discussed during the conference call, and a quote with the figures was provided to us by Verizon.)

What’s the 30-second analysis on all this? Sidecut Reports sticks by the premise of our latest report, the 4G LTE Market Report for January, 2012, in which we conclude that 4G LTE phone sales for all providers, including Verizon, are going to stay essentially flat until we see an LTE-capable Apple iPhone hit the market. As proof of the iPhone’s continuing popularity look no farther than Verizon’s Q4 numbers: 4.3 million iPhone activations vs. 1.6 million 4G LTE phone activations. Almost a 3-to-1 preference for the 3G iPhone vs. any 4G LTE choice.

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New 4G phone in the Sidecut house. Guess the provider?

The scorecard for the U.S. 4G wireless marketplace got an update Friday, with Verizon reporting 1.4 million new 4G LTE devices were activated during the third fiscal quarter. Though Sprint’s Q3 numbers are not yet official (the company is scheduled to report next week) we can likely extrapolate the 4G numbers for Q3 recently released by WiMAX network provider Clearwire, that being 1.9 million new wholesale customers, as almost all coming from Sprint.

So: For Q3, Sprint sold an estimated 1.9 million 4G devices while Verizon sold 1.4 million. For the year so far, we have Sprint at an unofficial 5.2 million 4G devices (unofficial because Sprint did not verify Q1 numbers, only Q2) while Verizon has sold 3.1 million. We’re not including any numbers from AT&T or T-Mobile because of their fuzzy descriptions of what is and what isn’t 4G.

The real question is — does 4G matter yet, from a market perspective? When you consider that even in a down quarter as customers waited for the iPhone 4S, some 4.7 million iPhones were sold in the third quarter — 2.7 million by AT&T and 2 million from Verizon — so it’s pretty clear that for most users having the coolest device trumps having a faster network connection (that’s 4.7 million iPhones vs. 3.3 million 4G devices, about half of which are phones). And with Sprint announcing Friday that it would no longer support unlimited data plans for devices other than phones, it’s a sure bet that in Q4 with the iPhone 4S in full sales swing from four different carriers, iPhones will once again outsell any 4G-flavored competition.

So maybe Sprint isn’t so crazy to put all its chips behind the iPhone, even though it seems like taking unlimited plans off the table is killing a winning 4G hand. As it stands, I would give the future 4G lead to Verizon even though it is behind on numbers, simply because if price and data caps are even, Verizon looks to be in a much stronger position in regards to network coverage and capacity, when compared to Sprint’s vision of a stripped-down LTE network that it is going to build itself. Eventually, I think it will matter how fast the underlying network is, especially when we are all conducting day-long video conferences over the phone. But that day isn’t here yet. For right now, iPhone is taking 4G to the woodshed.

And, if you still want unlimited 4G data, you can still buy a Wi-Fi hotspot or a USB dongle from Clearwire’s Clear brand. In a statement, the company said it would keep selling unlimited plans for Internet devices, even though partner Sprint won’t. In an email exchange Clearwire said:

Clearwire believes in the value and simplicity that our unlimited plans offer to customers and we believe our customers do too. We are committed to continuing to offer unlimited options and do not expect this to change.